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Latin America: the missing financial crisis

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  • Porzecanski, Arturo C.

Abstract

This may well be the first time since Latin America gained its independence in the early 1800s that a major economic contraction and financial calamity in the industrialized world has not caused a wave of currency, sovereign debt or banking crises in the region. What explains Latin America's unprecedented resilience in contrast with, for example, Eastern Europe's now-evident financial vulnerability? Here we review the enormous progress made by many governments in Latin America in the past decade to reduce currency mismatches, allow for more flexible exchange-rate regimes, enhance the capitalization, funding and supervision of their banking systems, encourage the development of local capital markets, and implement sounder and more credible monetary and fiscal policies. Evidently, it is not necessary to wait for an improved international financial architecture in order for reform-minded, well-managed countries to reap the most benefits from, and minimize the deleterious impact of market cycles typical of, financial globalization.

Suggested Citation

  • Porzecanski, Arturo C., 2009. "Latin America: the missing financial crisis," Studies and Perspectives – ECLAC Office in Washington 6, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
  • Handle: RePEc:ecr:col034:5069
    Note: Includes bibliography
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    References listed on IDEAS

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    Cited by:

    1. Birdsall, Nancy & de la Torre, Augusto & Caicedo, Felipe Valencia, 2010. "The Washington consensus : assessing a damaged brand," Policy Research Working Paper Series 5316, The World Bank.
    2. Boonman, Tjeerd M. & Jacobs, Jan P.A.M. & Kuper, Gerard H., 2012. "The Global Financial Crisis and currency crises in Latin America," Research Report 12005-EEF, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
    3. Heinrich, Gregor, 2011. "Basilea III y la relevancia para la banca de desarrollo en América Latina
      [Basel III and the relevance for development banks in Latin America]
      ," MPRA Paper 47401, University Library of Munich, Germany.

    More about this item

    Keywords

    CRISIS ECONOMICA; RECESION ECONOMICA; CRISIS FINANCIERA; INDICADORES ECONOMICOS; SISTEMAS MONETARIOS; RECURSOS FINANCIEROS; ECONOMIC CRISIS; ECONOMIC RECESSION; FINANCIAL CRISIS; ECONOMIC INDICATORS; MONETARY SYSTEMS; FINANCIAL RESOURCES;

    JEL classification:

    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • F30 - International Economics - - International Finance - - - General
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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